Introduction
The achievement of a company relies on its strategy. An effective strategy provides a structure for a company to accomplish its aims. The company should assess its capabilities, limitations, prospects, and risks to develop an effective plan (SWOT analysis). A company must know the sector and market within which the business competes. Then, a plan must be put into action and reviewed to ensure it yields the anticipated results. Apple Inc is a case of an enterprise that has used a sound strategy. The company’s approach includes high standards, invention, and design. Apple has constantly released cutting-edge goods like the iPad, MacBook, and iPhone, helping it to keep a major market share (Sarpong et al., 2019). The business also places a high priority on the user experience, which has helped to build a base of devoted customers. Apple’s ability to handle its supply chain efficiently and produce high-quality goods cheaply is a key component of its success.
On the other hand, Sears Holdings is a prime example of a company with a strategy that can be considered bad. Due to the growing competition from online retailers like Amazon, Sears Holdings has needed help adapting to the retail industry’s changes. The strategy that they use has mainly been driven by efforts to cut the costs of manufacturing. Due to this, the services and goods that they produce have decreased. The business has also avoided doing business through e-commerce by using the internet and prefers conventional brick-and-mortar establishments (Ellitan, 2020). Therefore, they have physical stores where they sell their goods. The revenues and profits of the company have declined due to this lack of innovation and inability to adjust to market developments.
The success of an organization usually depends on having a solid strategy. A thorough analysis of an organization’s shortcomings, strengths, threats, and opportunities is necessary for the design to be effective (Agrawal et al., 2023). A solid awareness of the market and industry in which the business competes is also necessary. Implementation and regular monitoring are essential to guarantee the plan produces the expected results. The paper will look at the two companies, Apple Inc., which exhibits a good strategy, and Sears Holdings, which is an example of a company with a weak strategy.
Apple Inc.
Apple Inc. is a company that was founded in 1976 by Steve Jobs, Steve Wozniak, and Ronald Wayne. It has a track record for creating cutting-edge consumer gadgets, excellent software applications, and high-quality web services as a major player in the global technology sector. The company’s solid business strategy continually emphasizes innovation, user experience, and premium pricing. The success of Apple success can be attributed to its strategy. It has enabled the company to stay ahead in the technological development field. The company has been committed to creating unique and innovative products while prioritizing customer experience (Ellitan, 2020). It has resulted in a strong brand following. Moreover, its premium pricing strategy has helped maintain strong profit margins even in highly competitive markets.
Apple’s Strategic Approach
The company’s success in technology is largely attributed to its strategic approach to business, which prioritizes innovation, customer satisfaction, and high prices. Their business strategy is centred on developing cutting-edge products that disrupt the consumer electronics market. In order to achieve this goal, it focuses on creating goods that are innovative, user-friendly, and visually appealing (Lau et al., 2020). The simplistic but elegant design of the devices is a key feature that sets them apart from competitors. They prioritize aesthetics and usability, which creates a strong brand identity that resonates with consumers and has helped to establish a loyal customer base. The company places great importance on the user experience and its revolutionary products. has been instrumental in driving its success in the technology sector.
The company places a great deal of importance on the user experience and its revolutionary products. This has been instrumental in driving its success and putting it amongst the top position in the market share. It is seen clearly by the bright and engaging design of their retail locations. The approach of the brand to improving the customer experience heavily relies on the stores. They allow clients to use their gadgets firsthand and get customized help and guidance from their experienced team. The value of the products they produce is the foundation of its premium pricing approach (Bateh & Sofianopoulou, 2019). Consumers are willing to pay the premium because they believe the products are of higher quality even though they are more expensive than the competition. The reputation of the brand for innovation and quality and its image supports the price approach for premium customers.
Strengths
Apple’s success can be ascribed to several key advantages in its corporate strategy. The emphasis on innovation by the company is the most significant. Apple frequently releases ground-breaking items that completely alter markets. The products it releases have a high customer demand because they are innovative and use the latest technology (Bateh & Sofianopoulou, 2019). The company focuses on design which has given it a considerable competitive advantage as compared to its rival companies which need help to match the level and allure of Apple’s goods.
The focus of the brand on the experience of the customer is another asset. Consumers of any product will always have a different experience depending on the ability of the company to engage with them and the design of the retail shop. A devoted consumer base that is prepared to pay more for Apple products has been developed due to this design. Therefore, the brand provides excellent customer service leading to the business having a strong brand image. Last but not least, its ability to outperform its rivals in the profits it brings has been largely attributed to its premium pricing approach (Lau et al., 2020). Consumers of the products are prepared to pay a premium price since they believe they are of higher quality, even though they are far more expensive than their rivals. It has enabled the business to keep its strong profit margins while paying for research and development.
Apple is well known for its cutting-edge products and fantastic customer service, but its strategy has flaws. The overwhelming reliance on innovation in Apple’s strategy is one of its biggest flaws. Although it’s crucial to stay one step ahead of the competition, the pressure to innovate can be dangerous, and failure could result in losing its competitive edge. However, they emphasize on providing an excellent customer experience that may come at a steep cost (Bateh & Sofianopoulou, 2019). The corporation makes significant investments in its retail locations. The investments can sometimes be costly, and it can lead to passing on some of these costs to the customers through increased prices. This strategy may limit access to Apple products by some consumers and in turn lead them to choose cheaper substitutes. Furthermore, many potential buyers may need help to enter the market due to the premium pricing approach of Apple. Although the products of the company have a premium price point which reflects their high quality, it can limit their appeal to those on a tight budget who may choose less expensive options from rival companies.
Challenges
Despite being one of the most cutting-edge technology businesses in the world, Apple still faces difficulties. They must keep innovating and creating new products and services that set it apart from its rivals if it wants to keep holding the top spot in the market. It entails spending money on research and development to produce innovative technologies to fuel business expansion (Lau et al., 2020). The organization as a whole needs to put more effort into enhancing the consumer experience while also putting emphasis on innovation. A crucial part of the experience of the customer is how the retail shops operate. The shops need to be set up in a way that meets the shifting expectations of the clients. This consists of use of modern technology and providing the customers with a smooth experience when shopping both online and in person. Finally, there is a need for the company to figure out how to lower the cost of its goods without sacrificing quality. Despite the fact that their gadgets are known for their high quality and price points, there can be a barrier of entry for some customers. They can sell their products for less money while keeping the high quality that its customers want by cutting production expenses and optimizing its supply chain.
Future Growth
Apple is considered to be one of the world’s largest technology companies. However, there are several areas it can focus on to ensure it continues to grow in the future. One area for growth is continuing to invest in research and development. This will lead to the creation of innovative products and services. The reputation of the brand is strong in the area of development of new technologies. Therefore, they can further explore the areas of augmented reality and artificial intelligence for them to stay ahead of their competitors (Lu et al., 2022). The next area that the company can focus on is expanding their product lines to target new markets. This can involve exploring opportunities in emerging markets, such as India and Africa, which has a growing demand for smartphones and other consumer electronics.
Through this expansion, the organization is able to tap into new markets and attract more customers. Finally, another area that can be focused on is the improvement of the supply chain. The reason for this is to reduce costs and improve efficiency (Bateh & Sofianopoulou, 2019). They can work with their suppliers to improve production processes and reduce the cost of raw materials. Through the process of streamlining their supply chain, it can improve its profitability and offer more competitive pricing to customers.
Sears Holdings
Sears Holdings is an American retailer that was once an iconic company known for selling merchandise to rural areas with no access to shops. However, the company has been struggling in recent years due to its flawed business strategy. Despite that fact that it leads in the chain of department stores, its main focus has been on cutting costs. This has led to asset sales and lack of investment in technology which has caused its decline. The company has ignored the changing market trends and consumer preferences. It has failed to keep pace with its competitors who adjust to the market changes (Yin, 2021). Lack of investment in technology has particularly been damaging as the world becomes increasingly digital, and consumers demand convenience and innovation. Sears Holdings has been selling assets to generate revenue instead of investing in their stores. This has further weakened its position in the market. In summary, the bad strategy of the company has made it difficult for the company to survive in an intensely competitive retail industry.
Sears’ Strategic Approach
The strategic approach of the organization revolves around cost-cutting, asset sales, and a lack of investment in technology. For the company to cut costs, it has resorted to measures such as closing stores and laying off employees which significantly reduce their expenses. It has also been selling off its valuable brands and properties to raise cash that it needs to stay afloat. However, it lacks in investment of technology which has put it at a disadvantage when compared to its competitors. Since most customers prefer to shop online nowadays, the slow adoption of online sales and customer engagement strategies has resulted in a decline in its overall sales and market share (Sarpong et al., 2019). Therefore, in as much as the company reduces its costs and raises cash, its inability to keep pace with the changing demands of the market has made the strategy of the company bad.
Strengths
The strategic approach of Sears Holdings has a few notable strengths. One of the strengths it has is its cost-cutting measures. They have reduced their expenses through store closures and job cuts. This has led to an overall reduction in operating costs and thus maintaining their profits. The measures have been essential in an increasingly challenging retail environment where many other retailers have struggled to stay afloat. Additionally, the company engages in asset sales which include its valuable brands and properties (Harris et al., 2019). Due to this, the company has been able to raise cash that it can use to continue operating. The approach has been critical for the company as it has faced increasing competition as well as declining sales in recent years. However the strategic approach of the company has also had significant weaknesses. It is seen in the lack of investment in technology, which has left it behind its competitors in terms of online sales and customer engagement.
Weaknesses
In addition to its strengths, their strategic approach has had several significant weaknesses contributing to its decline. A very notable weaknesses has been the focus of the company on cost-cutting at the expense of quality. It reduces its expenditures through closing of store closures and job cuts. Sears has also reduced the costs they use to maintain their stores and customer service which has resulted in a decline in the quality of its stores (Lu et al., 2022). In turn, the customers have had negative experiences and lack of loyalty to the company. The other weakness in the approach of the company has to do with its focus on asset sales. This has left it with only a little of its valuable brands and properties. The company has sold off many of its most valuable assets leading to a reduction in its ability to generate revenue and compete with other retailers.
The strategy of the company needs to focus more on investing in technology. With the advancement of the internet, more customers prefer engaging in online shopping as compared to physical walk ins. The lack of online presence of the company and its weak e-commerce platform makes it less superior than its competitors (Harris et al., 2019). The strategy makes the company not engage online with its customers which leads to reduced loyalty in the increasing internet space. Therefore, Sears Holdings needs to invest in its stores, improve customer service, and develop a more robust online presence. Although to make these changes, it will have to use a big amount of investment, it will be critical if the company hopes to remain competitive in the retail industry and stay relevant to its customers.
Challenges
There are several challenges that Sears Holdings faces which can impact its long-term viability in the retail industry. A challenge that is significant is their lack of quality in their stores and customer service. A large number of their customers have complained of long wait times and unhelpful staff. This has contributed to a decline in the customers due to their experiences. The company needs to invest in store renovations and staff training to improve the quality of its stores and customer service. Another critical challenge is the development of a solid e-commerce platform (Harris et al., 2019). Online shopping is gaining importance thus the limited online presence and weak e-commerce platform of Sears have put it at a significant disadvantage compared to its competitors. Therefore, it needs to invest in technology to develop a robust e-commerce platform for it to compete with Amazon and other online retailers to remain competitive.
A third challenge for Sears is generating revenue without selling its valuable assets. While asset sales have helped Sears raise cash in the short term, they have also reduced its ability to generate income over time. To address this challenge, Sears must explore new revenue streams and business models that rely on something other than selling off its remaining valuable assets. Finally, Sears also faces significant competition from other retailers in the industry (Sarpong et al., 2019). Many of its competitors have invested heavily in technology and e-commerce, giving them a considerable advantage in the market. To remain competitive, Sears must differentiate itself through unique product offerings, superior customer service, or innovative marketing strategies.
Future Growth
Sears must focus on several key areas to achieve future growth and remain competitive in the retail industry. Firstly, Sears must invest in technology and develop a robust e-commerce platform to compete with online retailers. It will require a significant investment in IT infrastructure and digital marketing. Sears should focus on building an e-commerce platform that offers customers a seamless and personalized shopping experience with customized recommendations, easy navigation, and various payment options (Harris et al., 2019). Secondly, Sears needs to focus on improving the quality of its stores and customer service. It will require investment in store renovations, employee training, and a focus on providing customers with a positive and enjoyable shopping experience. Sears should also explore innovative store formats, such as pop-up stores, to attract new customers and offer a unique shopping experience.
The other thing that the company need to focus on is building its brand and developing unique product offerings. It can be achieved through partnerships with other famous brands and influencers, and acquiring proprietary brands exclusive to the company. Sears should also focus on creating marketing campaigns that resonate with its target audience and build brand loyalty (Sarpong et al., 2019). Finally, the exploration of new revenue streams and business models to generate revenue without relying solely on retail sales should be done. This could include partnerships with service providers, such as home repair or installation services, or the development of subscription-based services that offer customers ongoing benefits and rewards.
Conclusion
The two companies that have been discussed, Apple and Sears Holdings, exhibit contrasting strategies. The strategic approach of Apple is based on innovation, customer focus, and brand strength, while the one for Sears Holdings is flawed and focuses on cost-cutting, asset sales, and a lack of investment in technology. Apple has strategic strengths that include its brand, innovative products, and customer focus. Its weaknesses include its high prices and reliance on a few essential products. On the other hand, the strategic strengths of Sears include its cost-cutting measures and asset sales. These have led to the company staying afloat in a challenging retail environment. Its weaknesses on the other hand include bad customer service, store quality being poor, lack of investment in technology, and limited ability to generate revenue. Going forward, the focus of Apple needs to be in investment in research and development, expansion of its product lines, and improvement of its supply chain.
On the other hand, Sears needs concentration in improving the quality of its stores and customer service. They can also invest in technology which will lead to the development of a robust e-commerce platform while finding ways to generate revenue without selling off its remaining valuable assets. A good strategy is essential for the success of any organization. The approach should consider the strengths, weaknesses, opportunities, and threats of the organization. Focus on the customer, innovation, and flexibility should be considered. A bad strategy, on the other hand, can lead to the decline and failure of an organization. A good plan can be based on short-term thinking, cost-cutting, and a need for more investment in technology and innovation. Therefore, organizations must develop a good strategy for long-term success and growth.
References
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